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Monday, May 27, 2024

Stock market expected to rebound this week

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Philippine stocks are expected to stage a technical rebound this week on potential bargain-hunting after last week’s slump.

Philstocks Financial Inc research head Japhet Tantiangco said the market, which closed below the 6,500 level, is ripe for bargain-hunting.

“With the market’s drop, the market is now at even more attractive levels. Hence, episodes of bargain-hunting could be seen next week,” Tantiangco said.

He said, however, this rebound might not be sustainable and could only be expected over the near-term given the lingering concerns, including the heightened tension in the Middle East and the delay in interest rate cuts.

“Main concern next week will still be the Middle East tensions, particularly the course of action that Iran would take following the attack from Israel,” Tantiangco said.

He said another retaliation from Iran could again send the market lower.

Aside from geopolitical risks, inflation concerns are also expected to weigh on investor sentiments including rising global oil prices, tight energy supply, weakening of the peso against the dollar and lower agricultural production due to El Nino drought.

The 30-company Philippine Stock Exchange index dropped 216 points, or 3.25 percent, to close at 6,443 on Friday.

The daily turnover averaged P6.1 billion, while the average net foreign selling reached P657 million.

Online brokerage firm 2TradeAsia.com said the onset of first-quarter corporate results could boost market sentiments and provide excitement to the market in the coming weeks.

It said, however, that investors continued to be sensitive on issues related to inflation and interest rates.

“Dissolving upside risks in the medium term are swaying attention back to defensives. We also underscoring that the recent slide in prices have made dividend plays more accretive,” 2TradeAsia.com said.

The market’s immediate support is seen at 6,300 this week, while resistance is between 6,550 and 6,600.

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